Welcome to our Reverse Mortgage Servicing Department

Transcription

1 Welcome to our Reverse Mortgage Servicing Department New Loan Reference Booklet

2 Reverse Mortgage Frequently Asked Questions 1. HOW CAN I REQUEST FUNDS FROM MY LINE OF CREDIT? If you selected a line of credit as part of your payment plan option, you may request those funds by sending in a written request to the servicing department. You will receive a Line of Credit draw request form with each monthly statement, provided that you have available funds remaining. The draw request form can either be mailed to us (our address is on the form) or faxed to us toll free at (866) Once we receive your signed request, it will be processed and we will deposit the funds electronically in your bank or credit union account within 5 business days. If you request the funds be paid by check, please allow 7 days for mail delivery time to receive it. 2. WHO IS RESPONSIBLE FOR PAYING THE PROPERTY TAXES AND INSURANCE ON MY HOME? When you took out your reverse mortgage, you signed documents which require you to make your property tax payments on time, and to keep your homeowner s insurance and flood insurance (if applicable) current. Unfortunately, these important requirements can sometimes be overlooked. However, by not paying your taxes or insurance on time, it could cause your reverse mortgage to be placed in default status and your loan could be called due and payable. If your loan is approved to be called due and payable, it could lead to foreclosure on your home, and we want to help you avoid that situation at all costs. If you ever experience difficulties paying your taxes or insurance, please call our office at (866) so that we can work together to solve the problem. Reverse mortgage borrowers are currently only allowed to participate in tax deferral programs in the states of California, Oregon and Massachusetts. However, you are encouraged to look into local senior tax exemption programs, which may decrease your annual property tax bill. You also can always seek the advice, free of charge, of a HUD counselor by calling their toll-free number at (800) WHAT SHOULD I DO IF I HAVE REQUIRED REPAIRS THAT NEED TO BE COMPLETED? If you have certain repairs to your home that were required as a condition of receiving your reverse mortgage, you will receive information from us that will be mailed to you shortly. 2

3 This letter will provide you with a step-by-step instruction guide, which will take you through the repair process. You do not need to wait for this information before you start the repairs to your home. It is important that you get them started as soon as possible, to ensure that you are able to complete the repairs by your required deadline. 4. ANNUAL OCCUPANCY CERTIFICATION As part of receiving your reverse mortgage, you agreed that you would live in your home as your primary place of residence. You can take vacations or leave the home for up to 12 months without defaulting on your reverse mortgage. However, please let us know if you are going to be out of the home for more than two consecutive months, so we can keep our records current for the mailing of your monthly statement. The Reverse Mortgage Servicing Department is required by HUD to verify, on an annual basis, that you are still living in your home. You will receive a letter from us each year, starting one year after you received your reverse mortgage. In order to certify your occupancy, you will simply need to sign your name on the document within 30 days and send it back to us. 5. HOW DO I ARRANGE FOR MY REVERSE MORTGAGE PAYMENTS TO BE DEPOSITED DIRECTLY INTO MY BANK OR CREDIT UNION ACCOUNT? If you provided a voided check at the time of your loan closing for this purpose, you do not need to do anything. If you did not provide a voided check at closing and would like to do so now, please mail us a voided check as well as a letter asking that your funds be sent to you via direct deposit. If you would like to set up your funds to be direct deposited to a savings account, you will need to obtain a letter from your bank or credit union (on their letterhead) listing the savings account number, the bank or credit union s routing number, and any names that are listed on the account. We will set up your direct deposit when we receive the letter from your bank, along with your letter requesting that we set you up on direct deposit. It is important to note that only the borrower(s) on the reverse mortgage (or financial Power of Attorney) can be listed on the account that is used to set up the direct deposit. There is no fee charged to you for the direct deposit service. 6. WHEN WILL I RECEIVE MY SCHEDULED MONTHLY PAYMENT? If you elected to receive a scheduled monthly payment as part of your payment plan option, your first payment will be sent to you on the first business day of the month following the funding of your loan. As an example, if your loan funded in November, your first payment would be sent to you on the first business day of December. 3

4 If you are set up on direct deposit, your monthly payment will be in your bank or credit union account on the first business day of each month. If you elected to receive a scheduled monthly payment and requested a paper check, it will be mailed to you on the first business day of each month. Please allow for a mailing time of 7 days for your check. 7. WHAT HAPPENS TO MY REVERSE MORTGAGE IF I PASS AWAY OR MOVE FROM THE HOME PERMANENTLY? Your reverse mortgage will have to be repaid when the last surviving borrower on the loan passes away, moves from the home permanently, or does not occupy the home for longer than 12 months. Depending on the type of reverse mortgage you received, you (or your heirs) may be eligible for time extensions ranging from six months up to one year. These potential time extensions are only to be used to provide time to satisfy the balance of the reverse mortgage. If the home is sold for more than the balance of the reverse mortgage, the remaining proceeds from the sale are yours (or your estate s) to keep. 8. WILL I RECEIVE AN ACTIVITY STATEMENT ON MY REVERSE MORTGAGE? You will receive a monthly statement of the activity on your reverse mortgage. These statements are mailed out by the 5th business day of each month. Because of mailing time, it can take up to 7 days after that for you to receive your statement in the mail. You also will receive an annual statement in January of each year detailing all of the activity on your reverse mortgage over the previous year. If you pay your reverse mortgage in full or have actually made a payment towards interest or mortgage insurance premiums during the past year, you will receive a 1098 mortgage interest statement by January 31st, which you may use for tax return filing purposes. Because most reverse mortgage borrowers do not make any payments on their loan, 1098 mortgage interest statements are typically not sent until the loan is paid in full. 9. WHO OWNS MY HOME? You retain full ownership of the property. Your reverse mortgage is simply a loan taken out against the equity in your home. As long as you occupy the home as your principal residence, keep your property taxes and insurance current, and comply with all of the terms of your reverse mortgage, you will be in no danger of losing your home because of the reverse mortgage. 4

5 10. HOW DO I READ AND UNDERSTAND MY MONTHLY STATEMENT? For your convenience, we have included a guide on How to Read My Reverse Mortgage Statement at the end of this packet. 11. I WAS TOLD THAT MY LOAN MIGHT GROW. WHAT DOES THAT MEAN? Depending on the type of reverse mortgage you received, you may experience loan growth on your reverse mortgage. This growth is simply an increase in the amount of money that you are eligible to withdraw, if you elected to have a line of credit as part of your payment plan option. In order to simplify this concept, growth is sometimes explained incorrectly to reverse mortgage borrowers as being similar to earning interest on a bank account. Please know that your reverse mortgage is not a bank account and does not earn interest. The growth is simply additional credit that you may receive as time goes on with your reverse mortgage. Not all reverse mortgage loans have this growth feature. Those that do, typically experience growth in their available funds in their line of credit approximately equal to the current interest rate. However, because changing interest rates affect the level of growth, it is impossible to know what level of growth your reverse mortgage may or may not have over the life of your loan. 12. WHO SHOULD I CONTACT FOR ANY QUESTIONS ABOUT MY REVERSE MORTGAGE? Our Borrower Care Associates are available from 8:00 am to 8:00 pm Eastern Time Zone, Monday through Thursday, and 8:00 am to 5:00 pm Eastern Time Zone on Fridays. You can reach us by calling our toll-free number: (866) We can also be reached by fax at (866) , or via at: [email protected]. If you would prefer to write to us for anything related to your reverse mortgage, please mail it to the following address: Reverse Mortgage Servicing Department P.O. Box Lansing, MI

6 How to Read My Reverse Mortgage Statement (sample on next page) Account Number: This is your reverse mortgage account number. You will want to reference this account number when you call the servicing department for any questions on your loan. Current Payment Plan Type: This is the current payment plan type that you have selected for your loan. Current Loan Status: This is the current status of your reverse mortgage. Statement Period: This is the time period that your statement represents. In the sample statement, it is displaying all of the loan activity that occurred during September Current Net Principal Limit: This figure represents the total amount of any remaining money that you have available to borrow on your reverse mortgage. Depending on the type of payment plan option you selected, this figure would include any money available in your line of credit, as well as any monthly scheduled payments due to you. In the sample statement, the borrower has a total of $47, still remaining that they can borrow. 6 7 Current Available Line of Credit: This figure represents any money remaining that is available for you to borrow on your line of credit, if you selected a line of credit as part of your payment plan option. Interest Rate: This is the detail of the interest rate on your reverse mortgage during the statement period. In the sample statement, the interest for the month of September was calculated using 3.83%, and the mortgage insurance premium was calculated using 1.25%. 8 Interest Rate Change Notice: This is a notice to you of any upcoming changes in your loan s interest rate. In the sample statement, the borrower s interest rate will be decreasing to 3.45% on November 1st. 9 Detailed Transaction Information: If you had any transactions (line of credit advances, repayments, accrued interest, monthly scheduled payments, etc.) on your reverse mortgage during the statement period, they are listed individually in this section. At the bottom of this section, it also lists the current outstanding loan balance as of the end of the statement period. In the sample statement, the borrower s current outstanding loan balance as of September 30th is $82,

7 P.O. Box Lansing, Michigan Customer Service: (866) Toll Free Fax: (866) Sample Monthly Reverse Mortgage Statement THIS IS NOT A BILL 1 SAMPLE ONLY 4 Account Number: Statement Period: August 31, 2010 to September 30, 2010 $47, $47, Your Interest Rate on November 01, 2010 will be % /02/ /11/ /30/ /30/ /30/2010 $82,

8 Reverse Mortgage servicing department P.O. Box Lansing, MI